• Investing Insights & Exclusive Offers → Get Our FREE “Market Brief”
    Sign-up for our free weekly newsletter. Get unparalleled investing insights and exclusive Summer Sale discounts on Hedgeye research.

    Disclaimer: By joining our email marketing list you agree to receive marketing emails from Hedgeye. You may unsubscribe at any time by clicking the unsubscribe link in one of the emails. Use of Hedgeye and any other products available through hedgeye.com are subject to our Terms Of Service and Privacy Policy

Takeaway: COVID-19 reveals the fault lines in funding and conduct of health care and is now on a generational collision course

 Politics, Policy and Power | COVID-19 as Catalyst for Equality  - 6 15 2020 11 56 00 AM

Street protests about equality are now inextricably tied to the COVID-19 outbreak, and for good reason.

Politics

If there is a path to becoming the presidential nominee of the Democrat Party without the African American vote, I don't know it is.

Yet, that considerable influence has not yet conferred upon African Americans the many benefits of power: wealth, status and authority.

In fact, quite the opposite is true. The imbalance of probabilities for morbidity, infant mortality, poverty, incarceration and violence are all well-known but have met with indifference or, perhaps to be more fair, limited effectiveness, by a party with a history as the champion of equality.

As we have noted every chance we get, events like a pandemic tend to drag forward trends already in motion and frequently allows the unsaid to be spoken. Late last year, the Alabama State Democrat Party, a mess of a political organization, held a coup.

Led by 43-year-old State Representative Chris England, the party amended its bylaws, against the wishes of its sitting chairwoman, Nancy Worley, to require greater representation on the party's executive committee of racial and ethnic minorities and, importantly, youth. With the support of the national committee, the younger generation prevailed.

The problem?

Elected officials took for granted votes from the roughly third of Alabamans who are black or Hispanic, showing up at churches and pot-luck suppers every two to four years with very little effort in between.

It is for that reason, Joe Biden's remarks to Charlamagne Tha God in May reverberated in a way a member of the Democratic old guard could not have anticipated.

COVID-19's attack on minorities, due in part to the high prevalence of medical conditions like diabetes, hypertension and kidney disease, and in part to the associated high rates of poverty, lays bare for all to see what Alabama Democrats know; little progress is being made. The disease and its impacts are now inextricably linked to street protests and calls for justice and equality.

The youth of the protesters, the absence of the now-endangered old guard and the simple facts of COVID-19 are a recipe for change, not just in November but beyond.

Policy 

When looking for a reason political systems fail to address the catastrophic results of disease on a minority of the population, a good place to start is the budget.

Virtually all therapeutic development begins with the funding priorities of the National Institutes of Health. Those priorities have and continue to favor cancer.

 Politics, Policy and Power | COVID-19 as Catalyst for Equality  - Slide1

The National Cancer Institute absorbs 15% of NIH funding. The National Institute of Diabetes and Digestive and Kidney Disease gets just 5%. 

Worse, funding by disease is misaligned with impact on the American population. Brain cancer, with a prevalence of 0.1% is funded at about the same level as kidney disease with a prevalence of 2.1%. Diabetes appears to come closer to a priority that reflects disease burden.

That is until you note that a large chunk of that funding is directed to Type I research which largely affects children, not Type II that disproportionately affects minorities.

 Politics, Policy and Power | COVID-19 as Catalyst for Equality  - Slide2

The priorities of NIH are, of course, established by Congress and the White House both of which are populated by human beings - mostly white and male -  with a lived experience that informs their biases and preferences - to a fault.

Breast cancer, which of course strikes women of all races, has developed into a medical-industrial complex of sorts because advocates like the Susan B. Komen Foundation have built a public image for the disease that appears indiscriminate and likely to strike anyone, including the wives, sisters and mothers of U.S. Congressman and Senators. Brain cancer took the life of Beau Biden, the Democrat's presumptive nominee and after whom a large funding bill was named.

Type II Diabetes? Well, that something people who don't take care of themselves get.

Or so the tale is told. Truth is we don't know. We have not done enough research.

Power 

Despite the clear and compelling need to understand and treat diseases that plague minority communities and contribute to unemployment and poverty, health care is business for white people, especially men.

Black physicians only account for 5% of total. Black nurses are about 10% of total.

The causes are the same as those that have affected the country as a whole; segregation - voluntary and involuntary - limited educational and training opportunities until recently; with racism bringing up the rear to stymie employment options.

Some years ago I was devoting a good bit of my days to preventing the closure of Nashville's indigent care hospital that also served as the teaching hospital for Meharry Medical College, an Historically Black College and University.

As a show of force against the pro-closure mayor, Karl Dean, the leadership at Meharry orchestrated a series of public meetings with testimony from current students and graduates.

One after another, speakers came to the mic and detailed a long history of prejudice that prevented equal opportunities to training. Psychiatrists training at Meharry in the 1960s had to travel to Memphis for their residency because the Tennessee State-owned Central States Hospital in Nashville refused to let them practice there.

All these years later, the business of health care does not appear to have made much progress.

Is it because of the very personal way in which health care is delivered? Or the long tail of prejudice sustained by segregation in training all those years ago? Are there too few black doctors and nurses because there are too few black doctors and nurses?

 Politics, Policy and Power | COVID-19 as Catalyst for Equality  - Slide3

At this point, with COVID-19 ravaging minority communities, especially those affected by the (un)studied underlying medical conditions, and people in the street, the reasons don't matter.

What does matter is how the low level of diversity in health care's c-suite will be addressed.

In an age of social media campaigns and a tide clearly turned, the business of health care needs to do what the legal community did a decade or more ago: heavy recruitment and training of minorities.

If the health care industry does not follow the legal profession it will bear the scrutiny of investors who must answer to their constitutencies. The days of "adding shareholder" value are being replaced by a new system of priorities and standards that include diversity, inclusion and just being good people.

High time.